Let’s face it—market downturns aren’t fun. Watching your portfolio dip can trigger anxiety, second-guessing, and even panic. But here’s the twist: those uncomfortable moments could be your greatest opportunity. Given the current market landscape, this might be how you are feeling right now. With a market decline at the beginning of April due to the tariff announcements and then a rebound with the S&P 500 pushing into positive territory, it can be hard to decide when the right time to put money to work is. This is a question we hear a lot, and it can be a heavy psychological burden to try to rationalize when to put money to work. Some individuals like to dollar-cost average into the market in a methodical way, and some want to invest their money quicker in a lump sum. Is one wrong or right? Often, it seems that a mix of both may be the best option, depending on market conditions when you are contributing.
It might happen next month, or maybe next year—but volatility is inevitable. Before the next drop arrives, ask yourself two critical questions:
- If the market declines, should I still be contributing to my investment accounts?
- How will I react emotionally and strategically when that decline happens?
Planning ahead is the antidote to panic. A solid investment plan allows you to act rationally and confidently during turbulent times, without letting emotions take the wheel.
Why Contributing During Market Declines May Give You a Long-Term Edge
One of the smartest moves you can make during a down market is to keep contributing. Emotions often tell us to freeze or pull back, but market pullbacks often come with opportunity.
Think about it: when prices drop, your money buys more. That’s the simple but powerful concept of dollar-cost averaging, investing regularly regardless of market conditions. Feel free to check out our blog, Dollar-Cost Averaging: A Disciplined Approach to Investing, for a more in-depth explanation.
Take a look at this hypothetical illustration:
| Month | Contribution | Share Price | Shares Bought |
| Jan | $500 | $50 | 10.0 |
| Feb | $500 | $40 | 12.5 |
| Mar | $500 | $30 | 16.6 |
| Apr | $500 | $40 | 12.5 |
| May | $500 | $50 | 10.0 |
- Total Contributed: $2,500
- Total Shares Bought: 61.6
- Average Price Paid per Share: $40.5
Now compare that to an investor who only invested a lump sum at the start and then stopped. While both benefit from a recovery, the consistent contributor ends up owning more shares and stands to gain more as prices rebound.
- In the hypothetical example of a market above, you can see how using dollar-cost averaging works effectively in buying more shares when the market is down and fewer shares when the market is up.
The Cost of Emotion: Why Staying Invested Matters
Here’s where many investors get tripped up. They try to time the market—getting out when it’s scary, waiting for the “right moment” to get back in. But history shows that missing just a handful of the best days in the market can devastate your returns.
Let’s look at the S&P 500 from 2003 to 2022:
| Days Missed | Ending Value of $10,000 | Annualized Return |
| Invested All Days | $64,844 | 9.8% |
| Missed 10 Best Days | $29,708 | 5.6% |
| Missed 20 Best Days | $17,826 | 2.9% |
| Missed 30 Best Days | $11,701 | 0.8% |
| Missed 60 Best Days | $4,205 | -4.2% |
- Missing just 10 of the best days nearly cut returns in half.
- Assuming S&P 500 returns
- Source: https://www.crews.bank/charts/missing-best-20-day.
Why does this happen? Some of the market’s biggest gains often come right after a drop, exactly when fear is highest. If you’re sitting on the sidelines, you miss out.
This is why trying to time the market is a fool’s errand. It’s nearly impossible to know when the next big up day will happen. The best strategy? Stay invested and stick to your plan.
Down Markets + Discipline = Long-Term Wins
Put it all together and here’s what works
- Contribute consistently—even during downturns,
- Stay invested to catch the sharp rebounds, and
- Don’t let emotion drive your investment decisions.
This simple formula can give you a long-term edge over the average investor who panics, pulls out, and waits too long to get back in.
If you’d like to review your investment strategy—or just want to talk through how you’re feeling about the market—we’re here to help. Whether it’s smooth sailing or choppy waters, Green Ridge Wealth Planning has your back.
Green Ridge Wealth Planning
Plan, Grow, Preserve
Summary:
Smart investors intentionally welcome market declines as strategic entry points to invest more at lower prices, leveraging dollar‑cost averaging to increase long‑term gains. Consistent contributions during downturns build more shares over time compared to lump‑sum investing, enhancing portfolio value when markets rebound. Trying to time the market often leads to emotional decisions that miss the biggest rebound days, significantly reducing overall investment returns. Historical data shows missing just a few of the S&P 500’s best days can cut annualized returns by more than half, demonstrating the danger of market timing. A disciplined strategy—stay invested, contribute regularly, and avoid emotional reactions—offers smart investors a durable edge during volatile periods.
Disclosure:
Green Ridge Wealth Planning, LLC is a registered investment adviser. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment/tax advice. The investment/tax strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment/tax strategy for his or her own particular situation before making any investment decision(s). You are responsible for consulting your own investment and/or tax advisor as to the consequences associated with any investment.
The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of the AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.